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Legislative Memo

BILL:

S.5768 (Martins)

SUBJECT:

Apply Prevailing Wage to 421-A Real Property Tax Exemption Projects

DATE:

June 5, 2015

The Business Council opposes this legislation that would extend the real property tax law section 421-a tax abatement program for three years and impose a prevailing wage mandate for construction workers who work on private projects under the program if certain parameters are not met. Specifically, we oppose section 1 of the bill that amends the labor law to designate private projects as public works for the construction of housing projects with more than 50 units, where less than 50% of the units are affordable to 125% of the Area Median Income (AMI). This designation would impose prevailing wage rates on construction workers who work on these private projects.

Currently, section 421-a of the real property tax law provides a real property tax exemption for property owners who construct new multiple dwellings housing units on vacant, predominantly vacant, or under-utilized property three years prior to the start of construction. This highly successful program has helped spur huge development projects and increased the supply of housing units that are available within the city of New York.

Any legislation extending the 421-a program that includes a prevailing wage mandate would significantly drive up the labor of cost on the programs housing construction projects and consequently curtail economic development and the amount of new residential housing within the City of New York.

In addition, establishing any prevailing wage mandate on private project creates a precedent of significant concern for our membership. This would be the first time a prevailing wage mandate would be placed on a private project and could lead to a situation where this is expanded to other private projects. With New York already having the unfortunate designation of being one of the least business friendly states in the nation, opening the door to wage mandates on private projects will only exacerbate an already tough business climate.

New York should be welcoming the business community by reducing taxes and the regulatory burdens on businesses to spur growth and job creation, not enacting laws that inhibit companies from making necessary business decisions. For these reasons, The Business Council urges the legislature to oppose any prevailing wage mandate on projects supported through the 421-a program.